Row over whether foreign airlines and ETS rumbles on and ICAO is incapable of producing an effective carbon scheme

Date added: November 13, 2011

This month the US joined forces with over 12 other countries, including China,
India, Russia and Japan, to take the fight against the ETS to the ICAO, the UN
agency that sets airline standards. Brussels is standing firm. Jeff Gazzard argues
that as ICAO is run exclusively for the aviation industry, it is institutionally
incapable of imposing any global system of taxes or charges to reduce aviation’s
CO2 emissions. Everyone knows ICAO cannot, and will not, do it.

The history of aviation is littered with rows between the US and Europe, long
the world’s two most important airline markets.

But the latest one has the added excitement of threatening to turn into one of
the first big carbon trade wars.

…… talks about the ETS ….

………..

But the decision to extend it to companies outside the bloc – foreign airlines
– is the EU’s most ambitious move yet to force the rest of the world to comply with its environmental rules.

……………..

The ATA estimates the scheme would cost US airlines more than $3.1bn between
2012 and 2020, though some analysts say the costs will be lower.

At today’s relatively low carbon prices, the cost of the scheme should be small
compared with other industry charges, the Bloomberg New Energy Finance service
has calculated.

……….

The airlines’ legal challenge, still awaiting a final ruling from the European
Court of Justice, is not looking promising. Last month, an adviser to the court
cast aside most of the US airlines’ arguments, saying the EU legislation did not
infringe the sovereignty of other states and was compatible with relevant international
agreements.

Undeterred, both Republicans and Democrats in the US House of Representatives
a few weeks later approved a measure that would make it illegal for US airlines
to comply with the EU scheme.

……

This effort does raise the intriguing prospect of a US airline being unable to
fly to Europe without breaking either a US or an EU law.

In total, 26 countries told the 36-member governing council of the ICAO that
the EU measure “violates the cardinal principle of state sovereignty” and will
“curb the sustainable growth of international aviation”.

………………..

So far, despite the political pressure, Brussels is standing firm.

As the ICAO meeting ended, Connie Hedegaard, the EU climate commissioner, said:
“This decision will affect neither the EU’s commitment to working within ICAO
to agree on a global solution, nor our adopted legislation to include aviation
in the EU ETS. If the other countries want to reduce aviation emissions differently,
that is fine. Our legislation clearly says that if a country outside the EU takes
‘equivalent measures’ to reduce aviation emissions, all incoming flights from
that country can be exempted from the EU system.”

Imagine if the UN World Health Organisation had been captured by tobacco companies
– there would be no global tobacco control strategies and smokers, smoking and
the associated negative and costly health impacts would be on the rise. Fortunately
the WHO isn’t run by the tobacco industry.

But the UN ICAO is run exclusively by and for the aviation industry’s benefit.
In crucial areas such as safety and air navigation standards, ICAO can and does
play an important global co-ordinating role.

However, it is simply institutionally unable to deal effectively with the development
and imposition of any global system of taxes, charges or ETS policies that might
control and reduce greenhouse gas emissions from civil air transport: it can analyse,
dissect and discuss them ad nauseam – and does so brilliantly! – but the very
idea that this body will ever deliver a global scheme is risible nonsense.

The clarion calls from airlines, airports and myopic self-interested industry
regulators from around the globe for ICAO to work on a “global solution” is a
regrettable and transparent ploy to bury the issue for as long as possible. Nobody
is fooled by this. I repeat: nobody.

The EU’s 27 member states, their Parliaments’ and Environment, Transport and
Finance Ministries, working alongside the EC’s specialist Directorate Generals,
have effectively washed their hands of years of inaction at ICAO and have carefully
developed the fair and equitable inclusion of greenhouse gas emissions from all
flights into and out of Europe into the EU ETS.

The EU ETS should form the basis of a global scheme but ICAO is powerless to
deliver even this simple, straightforward option as is plain to see through the
prism of the last few week’s laughable antics in Montreal.

We also know of NO country outside of the EU’s 27 plus Switzerland and the Nordic
bloc who have taken the EU scheme’s option of agreeing a package of “equivalent
measures” which would exempt incoming flights from ETS rules and coverage. This
total lack of action also speaks for itself.

The inclusion of aviation’s greenhouse gas emissions in the EU ETS is a sophisticated
market-based solution that starts to control and reduce the climate change impacts
of unrestrained growth, which stubbornly continue to outpace the very best efficiency
gains technology and operational improvements can reasonably be expected to deliver.

An ETS can help close that gap which is why we support 100% the EU’s unwavering
committment to the January 2012 start date.